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    Business expenses No income

    Have taxpayer who started in Real Estate in 2017. She has some expense for license, and realtor association dues but no sales in 2017 so no income. Normally I don't do a Sch C without income but in real estate I realize this can happen. How would you handle this

    #2
    This is usually typical in the Real Estate sales profession. You have to determine the answers to two questions based on facts:

    Was the taxpayer actively engaged in a trade or business.
    or
    Was the taxpayer preparing to begin the trade or business.

    In general taxpayer can either deduct or amortize start-up expenses once the business begins rather than filing a Sch C with 0 gross receipts.

    If taxpayer actively engaged in the trade or business but didn’t receive income, then they should file Sch C, 0 gross receipts and the appropriate expenses.

    Remember the 3 out of 5 years profit (rule of thumb) otherwise it may be considered a hobby!
    Taxes after all are the dues that we pay for the privileges of membership in an organized society. - FDR

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      #3
      Given the 3/5 year rule I recommend she not do a Sch C until the year she has income. then she can amortize prior expenses as start up.
      Believe nothing you have not personally researched and verified.

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